South Korea’s Financial Watchdog Chief Warns of Household Debt Becoming a Systemic Risk

South Korea’s financial watchdog chief raised alarms on Tuesday regarding the rapid increase in household debt, warning that this financial imbalance could escalate into systemic risk.

At a meeting with local banks, Lee Bok-hyun emphasized concerns that if financial imbalances continue to grow and the overall soundness of the market deteriorates, it could lead to significant issues, particularly if home prices start to decline.

Currently, South Korea holds one of the highest household debt-to-economy ratios globally, with over 60% of loans from local banks linked to mortgages.